NEAR: A MONOLITH GOING MODULAR
A few years ago, building a new blockchain usually meant creating something from scratch, which would often be dubbed “ETH Killer” by journalists trying to catch attention or using an SDK to spin up an appchain on Cosmos.
Things have changed. Few people now create an entire Layer-1 from scratch because technology has evolved to enable builders to combine different layers to form one whole.
But let’s take a step back and start with the opposite of modularity: monolithic.
Monolithic blockchains
Blockchains have four different vital functions:
- Data Availability: this layer ensures that all the data required to verify the state is available
- Execution: this is usually the layer users interact with when they sign transactions, transfer, and deploy smart contracts.
- Consensus: describes how nodes come to an agreement in a decentralized network
- Settlement: is when a transaction is considered included in the blockchain and is highly unlikely to be rolled back.
In a monolithic blockchain, all four functions are executed by the same set of nodes. This has some benefits, such as high security, easier deployment, and potentially improved utility for users thanks to the ability to specialize the entire network.
However, requiring the same set of nodes to run all of that computation is demanding. This is why monolithic chains often sacrifice decentralization as the cost of verifying the chain increases.
NEAR is a monolithic blockchain that offers a highly scalable environment to facilitate adoption. This can be seen best in the high numbers of users using leading apps such as Kaiching, Sweatcoin, and PlayEmber, which often host a large web2 audience. However, unlike other monolithic chains, NEAR relies on sharding to distribute workload across the system without overstraining individual validators.
Src: https://pages.near.org/wp-content/uploads/2019/11/Artboard-9.png
Valuable lessons were learned during the recent inscriptions protocol launch that pushed some validators to the brink. As Illia assured listeners during a recent Twitter space, the team will work on optimizing NEAR further and creating an experience where a hyped mint on one shard won’t deter user experience on completely separate dApps.
Beyond being a monolith, however, since coming out with the Blockchain Operating System (BOS) as a unifying interface for a fragmented web3 landscape, NEAR is increasingly becoming part of the modular thesis.
Modular blockchains
The main idea of the modular thesis is to split the four core functions of a blockchain and build dedicated layers around them. This notion started taking off when Celestia announced the launch of the first Data availability and consensus layer and has flourished since. By separating data availability, execution, settlement, and consensus, each layer can be optimized.
The modular narrative gained further steam as activity on Ethereum Layer-2 networks picked up since operators quickly realized how expensive it was to submit their transaction data to Ethereum mainnet. All for the sake of Data availability.
Enter NEAR DA.
How NEAR DA benefits Ethereum
The cost of publishing to Ethereum often makes up nearly 90% of the whole operating cost. Yet data availability is crucial to keep rollup operators in check and verify their state. While Ethereum has pivoted to a roll-up-centric roadmap and is planning to introduce new storage capacity to its validators with Danksharding, it’s unclear when these will be delivered.
And even with full Danksharding, there is a remaining burden on rollup operators and other entities that require full transaction history to ensure access to the data because Danksharding also includes erasing certain data from validator nodes after 60 days.
Fortunately, rollups can now tap into NEAR’s storage capacity. NEAR runs four shards with roughly 16MB throughput a second. Assuming 100 bytes per transaction, you can store quite a significant amount of your data on NEAR at a fraction of the cost of publishing to NEAR.
As such, NEAR could solve two challenges: rollup operators even under Danksharding, high fees, and making full history available. With NEAR DA, the cost is estimated to drop by 8000-fold. This decrease in fees can be passed on to users while also allowing developers to pick their own margins.
The first few rollups using NEAR DA are Caldera, Fluent, and Movement Labs.
On Finality
However, rollups and L2s face another challenge these days: there are a lot of them, which fragments liquidity and creates a worse user experience, especially because devs have a hard time building cross-rollups because of differing finality.
What’s finality anyway, and why does it matter for rollups?
Finality describes the state in which a transaction is considered final. It’s worth mentioning that often, in blockchains, finality is more probabilistic than absolute, meaning the risk of the chain being reversed is negligible. NEAR, on the other side, uses BFT finality, which is absolute, where transactions are finalized via attestations. What this simply means is that NEAR has a very fast finality of 3–4 seconds.
Rollups, on the other hand, have a finality that takes hours or up to 7 days. In a scenario where one rollup wants to cross-transact with another, this represents a hurdle. The fastest they can interact depends on the slowest finality on either.
What rollups need to enable cross-rollup is something that NEAR has integrated since its beginning: the ability to handle responses asynchronously with fast finality.
How fast finality unlocks the multi-rollup future
On NEAR, every account and smart contract is basically a rollup. Consequently, the team knows how to enable rollups to communicate in a scalable manner. Naturally, NEAR is one environment, and rollups have different constraints.
Nevertheless, with the fast finality layer that combines the security guarantees from Eigenlayer re-staking with the finality speed of NEAR, rollups now have a way to interact with each other quickly and in a seemingly synchronous way.
Src: https://twitter.com/mraltantutar/status/1732153913191637342/photo/1
The path ahead is clear, abstracting away as much of the fragmentation as possible while making it as easy as possible to use dApps on the Open Web.
NEAR is following a dual approach of being a monolithic blockchain that can scale to millions while also offering some of its tech under the modular paradigm. Ultimately, it’ll benefit all of web3 if we can figure out how to solve fragmentation and focus on building services and products people want.
Written by @NEAR_intern
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NEAR is on a mission to onboard a billion users to the limitless possibilities of Web3 with the Blockchain Operating System (B.O.S). Leveraging its high-performance, carbon-neutral protocol, which is swift, secure, and scalable, NEAR offers a common layer for browsing and discovering the Open Web.
